According to the SMM survey, domestic stainless steel production totaled 2.76 million tons in September, up 21.10 percent per month and 29.52 percent from a year earlier. Production of 200 series stainless steel increased 12.58% from the previous month to 859,000 tons in September, that of 300 series increased 23.84% month on month to 1.52 million tonnes and that of the 400 series was 379,500 tonnes, up 31.95% from the month.
Most domestic steel mills recorded significant increases in September production, while Indonesian stainless steel production declined over the same period. Specifically, production of 400 series stainless steel has seen the most aggressive increase of all. However, the demand for 400 series from the appliance and infrastructure sectors has not yet recovered significantly, thus the stock of 400 series has accumulated slightly. Trading in the 200 and 300 series improved from the previous month, leading to a slight drop in stocks.
Domestic production of 200, 300 and 400 series stainless steel in October is expected to increase further on the grounds that most steel mills resumed production in September. In particular, the main increase will be due to some large steel mills and new projects, while small and medium-sized companies will remain cautious in scheduling production. Indonesian stainless steel production is expected to increase slightly. To be precise, the production of 200 and 300 series stainless steel should see palpable increases as the profit margins of these two products remain.
However, the increase in 400 series production is expected to be limited in October as raw material costs, such as ferrochrome and plain carbon steel scrap, remain high, while factory inventories and inventories social decline quite slowly. In terms of demand, it is expected that stainless steel demand will not be as robust as it was in October in previous years. Nevertheless, various bullish macroeconomic policies will be rolled out across the country in October this year, and the actual effect remains to be seen until they are implemented. Generally speaking, the global supply and demand for stainless steel is on the rise. Costs supported firm prices, but room for improvement is limited by sufficient supply. Therefore, SMM believes that stainless steel prices will come under downward pressure in October.
Source: SMM Information & Technology
